"Economical" is the polite term for Gateway's offices. "Ruthlessly cheap" might
be more accurate. Big, ugly, industrial air-conditioning units stick out of the
corrugated metal wall beside the unobtrusive main entrance, and the lobby is a
bare box. There are a couple of couches, a couple of plants in tubs, some
computers on Formica display tables, and two ramshackle coat racks that look
as if they were dragged in from a garage sale. Visitors in immaculate business
attire arrive here in the early morning like suitors courting a wealthy
débutante, but the young, shaggy-haired Gateway employees who come wandering
out to meet them look like mall rats in their faded jeans, dirty sneakers, and
T-shirts.

Michelle Gjerde, of the press relations staff, seems to be the only Gatewayite
who feels an obligation to dress well. She takes me to the assembly building,
where she introduces me to a guy named Shane Hartnett. Shane is only 24, he's
been working at Gateway since he was 17, and he's still taking college evening
classes in business studies. Meanwhile, he supervises the entire Gateway
manufacturing operation.

Big cartons containing motherboards, ribbon cables, and disk drives enter the
receiving area from trucks outside. The cartons are inspected and stacked on
enormous steel shelves that rise 30 feet above the polished concrete floor.
Orange-tinted high-pressure sodium lamps illuminate this 250,000-square-foot
area, which looks like the warehouse in the final shot of Raiders of the Lost
Ark; but the inventory of most parts lasts only five days, at most.

From the warehouse, parts are shifted to the assembly area. To laid-back
rhythms of country music, as many as 32 teams of 25 workers run their own
mini-assembly lines, Japanese-style. Kids in sweat shirts and jeans seem
relaxed and cheerful as they use electric screwdrivers, building PCs by putting
together motherboards, power supplies, and disk drives. They make it look as
simple as,
say, installing a new car stereo.

Gateway never builds a computer until someone orders it, and every system is
custom-configured. After assembly, the units are hooked up for automated
testing and software installation, then moved on conveyors to the shipping area
where they are packed in black-and-white "cow boxes" and rolled onto big rigs
owned by United Parcel Service. The trucks have to travel 100 miles to Omaha,
Nebraska, to reach the nearest airport that's big enough for jet service.

"It's a fairly simple process," says Shane. "Really, it's more of an assembly
operation than a manufacturing operation."

"We run what we call a virtual engineering organization," says Tony Olson, a
quiet, methodical man who is director of engineering. "We go out and see what's
being done, and we decide which standard is going to become dominant."

On the basis of this research, and guesswork - Olson's people specify every
detail of a new computer from the chip set to the keyboard layout. After that,
they get somebody else to do the fabrication. In the case of "Liberty," a new
Gateway laptop with an oversize 10.4-inch color screen, Gateway drew up the
specs, then got Sharp to make the screen and Sanyo to manufacture the computer.

By delegating the manufacturing chores, Gateway leaves itself with only four
things to think about: design, advertising, selling, and predicting the market.
This last factor is probably the most crucial. But in a fast-changing industry
ruled by fickle public taste on one side and unpredictable giants such as Intel
and Microsoft on the other, how can Gateway possibly plan ahead?

"We maintain multiple road maps here," says Tom Grueskin, who is currently
responsible for companywide implementation of Windows 95. "There are people
trying to plot future paths in software, or operating systems, or hard drives,
so when we want to design a new product, we have a list of all the
alternatives."

Shrewd, bottom-line-oriented, and well-educated, Grueskin, at 32, is one of the
elder statesmen at Gateway. "In school I was a finance guy," he says. "Then I
worked for a baking company and sold institutional croutons. I was so
embarrassed about that job; I hated telling people what I did. Then I went out
to Ted's ranch, and there were no locks on the doors, a couple of cars out
front, a UPS truck, and a couple of dogs running around. When I started
officially, we had 40 employees - and we did our first $2 million month."